Two common defences failed - and any business using labour hire should take note
A New South Wales court has ruled that a labour-hire company cannot use a casual loading to avoid paying long service leave.
In a decision handed down on July 27, 2026, the Industrial Court of New South Wales found that labour-hire company Allstaff breached the Long Service Leave Act when it did not pay accrued long service leave to 13 former workers. The company had argued the 25% casual loading it paid already accounted for the entitlement. The Court did not accept that.
The workers were pick-packers placed through Allstaff at two Woolworths distribution centres. Woolworths was not a party to the case, and the Court made no findings against it. In mid-2023, Allstaff stopped supplying casual labour to those sites and recommended its workers contact the incoming labour-hire providers. Nine of the 13 had at least 10 years of continuous service, and the company accepted that the remaining four had service that counted as continuous under the Act. None of the workers had ever taken long service leave, and none were paid out for it when their employment ended. A union brought the claim on their behalf, seeking a declaration and compensation.
Allstaff relied on two defences. The first was that the casual loading already covered long service leave. The company pointed to older award decisions in which a casual loading was treated as covering a range of leave entitlements, and to wording it had added...
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